Opalesque Industry Update —Morningstar, Inc., a leading provider of independent investment
research, today reported preliminary hedge fund performance for August 2012 as well as asset flows through July.

The Morningstar MSCI Composite Hedge Fund Index, an asset-weighted composite of nearly 1,000 hedge funds in the
Morningstar Hedge Fund database, inched up 0.5% in August, falling short of the MSCI World Stock Index's 2.5%
climb.

"Speculation of further central bank easing in the United States and Europe drove most global equity markets higher in
August," said Mallory Horejs, an alternative investments analyst with Morningstar. "Managers across most hedge fund
strategies found opportunities to profit."

Despite light trading volume throughout August, developed-markets equities notably benefited from improving U.S.
economic data and the European Central Bank's bond-buying proposal. Hedge funds investing in North America and
Europe rose but failed to keep pace with the unhedged stock markets. The Morningstar MSCI North America Hedge
Fund Index climbed 1.5% but fell short of the S&P 500 Index's 2.3% increase. The Morningstar MSCI Europe Hedge
Fund Index trailed the MSCI Europe stock market index by a wider margin, as the indexes rose 0.5% and 4.4%,
respectively. Overall investor sentiment continued to improve throughout the month, and the Chicago Board of Options
Exchange Volatility Index fell to levels not seen since 2007.

Price trend-following strategies were one of the few groups to post losses in August. Currency trading proved
especially challenging as several currency pairs’ price trends reversed during the month. The Japanese yen, for
example, first depreciated against the U.S. dollar because of lower export numbers in Japan, but then appreciated on
news of Federal Reserve easing. The Morningstar MSCI Systematic Trading Hedge Fund Index, which includes funds
that trade price momentum across equity, interest-rate, currency, or commodity futures contracts, declined 1.2%.

After leaking more than $2.5 billion in June, hedge funds in Morningstar's database experienced yet another month of
sizable outflows, bleeding $4.2 billion in July. For the year to date through July, single-manager hedge funds in
Morningstar’s database lost more than $5.1 billion. Systematic futures funds experienced the greatest outflows by far,
losing $3.8 billion in July alone. Investors timed these withdrawals well, though, given the category's overall poor
performance in August. Funds in the event-driven and distressed-securities categories also suffered, leaking $415
million and $346 million, respectively.

August returns for the Morningstar MSCI Hedge Fund Indexes are based on funds that reported as of September 27,
2012. July asset flows are based on funds that reported as of September 17, 2012. Hedge fund investors, managers,
consultants, and advisors can access additional information through Morningstar Direct
SM
, the company’s global
research platform for institutions.